DGAP-News: QSC AG / Key word(s): Preliminary Results
QSC planning to boost free cash flow and again raise dividend
26.02.2014 / 07:30
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QSC planning to boost free cash flow and again raise dividend
Cologne, February 26, 2014. During the 2013 fiscal year, QSC continued its
evolution into an ICT provider, and increasingly invested in future growth.
With revenues of EUR 455.7 million, an EBITDA margin of 17 percent and a
free cash flow of EUR 25.6 million - according to preliminary numbers - the
company achieved all of the targets it had announced in early 2013. Given
QSC's stronger financial position and profitability, the Management Board
will propose that the Annual Shareholders Meeting raise the dividend by 1
cent to EUR 0.10 per share.
ICT business in Direct Sales grows by 11 percent
Preliminary numbers show that QSC generated revenues of EUR 455.7 million
in 2013, as opposed to EUR 481.5 million the year before. Regulatory- and
market-induced declines in conventional TC revenues were offset by rising
ICT revenues. In 2013, just the significant reduction in mobile and
fixed-network routing and interconnection fees in December 2012 led to a
revenue shortfall of nearly EUR 30 million year on year. Plus revenue
shortfalls in the same amount stemming from persistent stiff price
competition in the conventional TC market.
On the other hand, ICT business in Direct Sales, in particular, developed
on a positive note in 2013, with revenues up by 11 percent to EUR 209.2
million. Its Outsourcing, Consulting and Networking business is benefiting
from the sustained high level of order bookings, totaling EUR 153.9 million
in 2013. Moreover, in 2012 QSC had won requests for proposals for three
major Outsourcing projects valued at some EUR 120 million, thus enabling it
to post new orders of EUR 193.1 million overall.
Transitioning these major projects into regular operation and the
investments this involved played a major role in raising capital
expenditures to EUR 39.6 million in 2013, as opposed to EUR 37.9 million
the year before. Nevertheless, preliminary numbers show that free cash flow
improved to EUR 25.6 million from EUR 23.6 million the year before.
Workforce rises by 14 percent to 1,689
In addition to fixed assets, QSC increasingly invested in future growth in
2013, first and foremost in ICT professionals and innovations. The
workforce grew by 204 people in 2013 to a total of 1,689. The development
budget rose by EUR 3.9 million to EUR 5.9 million. However, these
investments in future growth initially had hardly any impact on QSC's
profitability: According to preliminary numbers, EBITDA of EUR 77.8 million
in 2013 remained virtually unchanged from the previous year's level of EUR
77.9 million, even though tightened regulation burdened EBITDA by just
under EUR 4 million. The EBITDA margin advanced by 1 percentage point to 17
percent. As a result of declining depreciation expense, EBIT rose from EUR
24.6 million the year before to EUR 26.5 million, with consolidated net
income improving from EUR 19.0 million the year before to EUR 23.6 million.
Outlook for 2014: QSC to increasingly invest in growth
During the current fiscal year, QSC will be increasingly investing in
future growth, focusing on innovative ICT and Cloud products. Acquisitions
of small technology companies can accelerate this innovation process; just
at the beginning of this week, QSC acquired encryption specialist FTAPI.
Depending upon the progress that is made in conjunction with the market
launch of its innovations, QSC anticipates revenues of between EUR 450 and
EUR 470 million for 2014, along with an EBITDA of between EUR 60 and EUR 70
million and a free cash flow of between EUR 26 and EUR 32 million.
As in 2013, revenues are likely to develop on a two-track basis: As a
result of market and regulatory effects, rising ICT revenues will be offset
by sharply declining TC revenues. Both this decline as well as tightened
price competition, first and foremost in ADSL2+ business, are likely to
burden EBITDA by nearly EUR 10 million in 2014. Moreover, QSC is planning a
development budget that is some EUR 5 million higher than in 2013. In
addition, during the current fiscal year QSC will no longer be able to
benefit from the return of deferred income in the amount of some EUR 20
million per year that had been formed in connection with the buy-back of
network operating company Plusnet and returned on a periodic basis through
year-end 2013. Since this return had no impact on liquidity, the company is
planning for a renewed rise in free cash flow in 2014, in spite of higher
investments in future growth.
QSC Chief Executive Officer JÃ¼rgen Hermann notes: "In 2013, we internally
concluded the transformation process of becoming an ICT provider. With our
existing team, in 2014 we'll now be able to focus on expanding our
positioning as an innovative ICT provider." Hermann also intends to
continue to enable the company's shareholders to participate in QSC's
success: "The proposed 10-cent dividend per share represents the minimum
for future distributions."
<pre>
In EUR million 2013 2012
Total revenues 455.7 481.5
Revenues, Direct Sales (ICT) 209.2 187.9
Revenues, Indirect Sales (ICT/TC) 123.2 125.1
Revenues, Resellers (TC) 123.4 168.5
EBITDA 77.8 77.9
EBIT 26.5 24.6
Consolidated net income 23.6 19.0
Earnings per share 0.19 0.14
Free cash flow 25.6 23.6
Capital expenditures 39.6 37.9
Workforce 1,689 1,485
</pre>
Notes:
The 2013 Annual Report will be available for download at
www.qsc.de/en/qsc-ag/investor-relations.html from March 31, 2014. This
corporate news contains forward-looking statements. These forward-looking
statements are based on current expectations and forecasts of future events
by the management of QSC AG. Due to risks or mistaken assumptions, actual
results may deviate substantially from those made in such forward-looking
statements.
Queries to:
QSC AG
Arne Thull
Head of Investor Relations
Phone: +49 221 669-8724
E-mail: invest@qsc.de
Internet: www.qsc.de
End of Corporate News
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26.02.2014 Dissemination of a Corporate News, transmitted by DGAP - a
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Language: English
Company: QSC AG
Mathias-BrÃ¼ggen-StraÃe 55
50829 KÃ¶ln
Germany
Phone: +49-221-6698-724
Fax: +49-221-6698-009
E-mail: invest@qsc.de
Internet: www.qsc.de
ISIN: DE0005137004
WKN: 513700
Indices: TecDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, DÃ¼sseldorf, Hamburg, Hannover,
MÃ¼nchen, Stuttgart
End of News DGAP News-Service
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